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Treasury Committee highlights HMRC’s ‘unacceptable’ quality of service
A recent report published by the Treasury select committee has highlighted a wide variety of areas that caused ‘serious’ concern in regards to HMRC’s quality of service, including ‘unacceptable difficulties contacting HMRC by phone during peak periods’, ‘endemic delays in responding to post’, overly ambitious expectations in regards to IT projects, increasingly complex tax legislation, sustained cuts to resources, a management culture of ‘command and control’ and the negative legacy of the Revenue-Customs merger.
The report, 'Administration and effectiveness of HM Revenue and Customs' went on to say that HMRC would face even more challenging and difficult years as it tries to resolve open cases in PAYE and ‘further ambitious IT upgrades’. Because of this, the Treasury Committee warned that it was planning on monitoring HMRC’s performance during the remainder of the parliament and expects HMRC to deliver on their promises of improvements.
The committee’s report follows others published in recent weeks, including the National Audit Office’s investigation, in which it concluded that HMRC’s planned £1.6bn reduction in running costs represents a huge challenge.
It was acknowledged by the Treasury Sub-Committee’s report that HMRC was making progress in achieving efficiencies; however, they warned that if the planned further reductions in resources were badly managed, “HMRC’s performance will continue to deteriorate.
“There was near unanimity among our witnesses that the reductions made so far have had a damaging impact. We are particularly worried as there is no evidence that the methods that management will deploy to find ‘efficiencies’ and ‘cost savings’ have changed in any substantial way,” said the report, which added, “We also believe there is a tension between the drive for ‘more automation’ and ‘centralisation’ and the desire to empower and boost the morale of staff who must deliver the cost savings.”
The report cited witnesses’ concerns over how future reductions and cost efficiencies at HMRC were going to be managed. Many problems in the past had been caused by ‘cuts in anticipation’, some of which characterised the organisation’s change programme.
The report recommended that Whitehall looked once more at the savings that HMRC were expected to deliver in comparison to the efficiencies needed in order to deliver them, and to build in a contingency plan in case of ‘unexpected problems with implementation’.
“Technological improvements and process changes within HMRC have and will continue to deliver genuine efficiency savings,” the report said. “However, there have been credible suggestions that HMRC has in the past made savings by reducing staff numbers before the enabling efficiencies have been fully realised - with resulting impacts on performance and costs.”
‘Bleak’ Post and Phone Service
The report also looked at what it said was the general public and tax professionals’ continued dissatisfaction with HMRC’s service delivery, which, in its current state, could ‘undermine respect for the tax system’.
There were numerous reports made on HMRC in 2010 by the National Audit Office (NAO) and the Public Accounts Committee (PAC), which termed HMRC’s offering as ‘poor’. The PAC report stated that the Department was ‘taking steps to improve its performance’. The Treasury select committee highlighted HMRC’s poor phone answering performance, revealed in HMRC’s own Annual Report and Accounts as slipping to a five-year low, falling from 75.8% of call answered in 2009/2010 to only 48% in 2010/11.
Looking at the figures on a monthly basis, HMRC successfully answered 92.6% of 3.8m calls in November, but this figure fell to just 41.1% when fielding 3.8m calls in May 2010. When speaking to PAC regarding its report, HMRC stated that it aimed to answer 90% of calls ‘as soon as possible’. However, the Treasury select committee responded: HMRC’s performance at responding to telephone calls has been patchy at best and unacceptable at worst. “Based on past performance we do not have confidence that the department will be able to achieve its target,” the MPs concluded.
In regards to post, the Commons committee received a large number of correspondence from the general public, expressing concern and sometimes disbelief about the amount of time HMRC took to respond to post.
“Cases of replies being received only after two or three months, in each case from a different geographic location, are not uncommon.” The ICAEW’s Paul Aplin said accountants were regularly used to waiting two to three months for a reply to a letter. “When we ring to chase, the answer we regularly now get is, ‘We can’t find the letter.’ If you chase below two months the answer is, “It hasn’t come to us yet”. If you wait too long the answer is, “We can’t find it”; so you have to write again and go through the process again.”
In evidence, HMRC provided the Treasury select committee with graphs showing that during November 2010, approximately 60% of post received was turned around within 15 days of receiving it, whilst 90% was turned around within 40 days. Postal performance was fairly consistent overall, apart from 2009, when in March, turnaround within 15 days fell to less than 40% and generally, performance was less consistent in comparison to previous and subsequent years. It was noted by the CIOT and ATT that HMRC’s Debt Management Unit has been known in the past to try and recover incorrect amounts from the public because relevant mail had not been opened.
The MPs concluded that “Long delays in responding to post at HMRC are endemic. This is unacceptable.” They called for HMRC to establish minimum service standards for dealing with post - through the whole encounter rather than as individual items opened and asked for an indicative timetable from HMRC as to when it would achieve those standards.
The Treasury sub-committee report stated that the prospects of HMRC improving its customer service levels in the near future ‘appear bleak’, as the department is “still wrestling with the fall-out from the implementation of NPS and does not expect to clear the backlog of open cases until 2012”.
It also added that the chairman of HMRC, Mike Clasper didn’t expect customer service to be in “a great place” until 2013.
